If you are thinking of buying gold or silver in the next few days, it may be better to wait a little. Experts believe that the prices of gold and silver may remain volatile in the coming week. The main reasons for this are the increasing tension in West Asia, high prices of crude oil and economic data coming from major economies of the world.
Investors will keep an eye on America’s weekly unemployment claims, preliminary PMI (Purchasing Managers’ Index) data, as well as the decisions of the central banks of Europe and China. These developments may indicate what the future trend of interest rates will be like around the world.
Impact of increasing US-Iran tension
According to analysts, after the attacks on US-affiliated targets, the US Army has launched new air strikes against Iran. This has further increased the tension in West Asia. The impact of such a situation can be seen not only on crude oil but also on safe investment options like gold and silver.
Pranab Mer, Senior Vice President (Commodity and Currency Research), JM Financial Services, says that gold may remain under pressure before the US Federal Reserve meeting to be held at the end of the month. However, investors will also keep an eye on the increasing developments between America and Iran.
Big fall in gold and silver last week
On the Multi Commodity Exchange (MCX), gold for August delivery fell by about Rs 2,572 or about 2 percent last week and closed at Rs 1.40 lakh per 10 grams. Whereas silver for September delivery fell by Rs 6,261 i.e. about 2.8 percent to Rs 2.16 lakh per kg. The same trend was seen in the global market also. On Comex, gold closed with a fall of about 2.3 percent and silver with a fall of 6.4 percent.
Increased pressure on dollar and interest rates
According to Jatin Trivedi, research analyst at LKP Securities, a strong US dollar, expensive crude oil and the possibility of high interest rates remaining for a long time have increased the pressure on gold. He says that as soon as the prices rose slightly, investors gave priority to profit booking instead of new purchases. Even a slight strengthening of the rupee could not support gold because the dollar remained strong.
What will you keep an eye on next week?
Experts say that in the coming days, the US Federal Reserve meeting, PMI data of Europe and Britain, economic indicators related to China and the geopolitical situation of West Asia will decide the direction of gold and silver prices. If global tensions increase further, gold may rise again due to increased demand for safe investments. At the same time, if economic data comes in strong and the dollar remains strong, then the pressure on precious metals may continue.
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